Senate committee approves draft law paving way for legal crypto trade

Senate Committee Advances Virtual Assets Regulation Bill

The Senate Standing Committee on Cabinet in Pakistan has made a significant stride towards the legalization of cryptocurrency trading by approving a draft bill titled "Virtual Asset Act 2026." This legislative advancement is aimed at regulating virtual assets via the establishment and empowerment of the Pakistan Virtual Assets Regulatory Authority (PVARA). The authority is poised to play a pivotal role in issuing licenses and overseeing the country's burgeoning crypto market.

 

Role of Pakistan Virtual Assets Regulatory Authority (PVARA)

Under the proposed legislation, PVARA becomes the central body tasked with the management and regulation of cryptocurrencies within Pakistan. It will possess the jurisdiction to license entities for the issuance of crypto coins and to oversee crypto mining activities. Senator Dr. Afnan Ullah Khan, a member of the Senate committee, has highlighted PVARA's role in ensuring only licensed companies partake in these endeavors, fostering a controlled and secure crypto market environment.

 

Path to Legalization of Cryptocurrency Trading

The process for cryptocurrency trading to become fully legal in Pakistan involves several stages. Once the draft bill receives approval from both the Senate and the National Assembly, it will be forwarded to the president for signing into law. Dr. Afnan anticipates this regulatory framework will materialize within a short timeframe, potentially making crypto trading legal within a week of presidential assent. This development will enable major cryptocurrencies like Bitcoin, Ethereum, and XRP to be traded through sanctioned crypto exchanges within Pakistan.

 

Addressing Concerns and Penalties for Violations

The Virtual Asset Act 2026 is meticulously crafted to address various concerns traditionally associated with cryptocurrency operations, such as its use for money laundering and other illicit activities. The bill proposes stringent penalties for violations by licensed entities, showcasing the government's commitment to maintaining a secure and compliant financial landscape. By including such measures, the legislation aims to safeguard against potential abuse and enhance public confidence in virtual asset transactions.

 

The Role of No Objection Certificates (NOCs)

Prior to the formal legalization, PVARA had already commenced preparatory activities by issuing No Objection Certificates (NOCs) to global crypto exchanges such as HTX and Binance. These NOCs permit these platforms to engage in preparatory operations within Pakistan under specified regulatory conditions. While these certificates provide a framework for preliminary activities, they do not equate to a comprehensive operating license, highlighting the incremental approach Pakistan is adopting in formalizing its crypto landscape.

 

Conclusion: Paving the Way for Crypto in Pakistan

The approval of the Virtual Asset Act 2026 by the Senate committee marks a transformative moment for Pakistan's financial markets, potentially ushering in a new era of regulated digital financial transactions. With PVARA set to orchestrate the legal framework, Pakistan is positioning itself to tap into the progressive cryptocurrency trend, ensuring compliance and protection against misuse. This strategic move not only aligns Pakistan with global financial practices but also opens new avenues for economic growth and investment opportunities.